Correlation Between Everyman Media and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Everyman Media and Hollywood Bowl at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Everyman Media and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everyman Media Group and Hollywood Bowl Group, you can compare the effects of market volatilities on Everyman Media and Hollywood Bowl and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Everyman Media with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everyman Media and Hollywood Bowl.
Diversification Opportunities for Everyman Media and Hollywood Bowl
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Everyman and Hollywood is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Everyman Media Group and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group and Everyman Media is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Everyman Media Group are associated (or correlated) with Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Everyman Media i.e., Everyman Media and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Everyman Media and Hollywood Bowl
Assuming the 90 days trading horizon Everyman Media Group is expected to under-perform the Hollywood Bowl. In addition to that, Everyman Media is 1.09 times more volatile than Hollywood Bowl Group. It trades about -0.02 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.05 per unit of volatility. If you would invest 24,848 in Hollywood Bowl Group on August 31, 2024 and sell it today you would earn a total of 7,152 from holding Hollywood Bowl Group or generate 28.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everyman Media Group vs. Hollywood Bowl Group
Performance |
| Timeline |
| Everyman Media Group |
| Hollywood Bowl Group |
Everyman Media and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everyman Media and Hollywood Bowl
The main advantage of trading using opposite Everyman Media and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everyman Media position performs unexpectedly, Hollywood Bowl can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Everyman Media vs. Primary Health Properties | Everyman Media vs. Universal Health Services | Everyman Media vs. Planet Fitness Cl | Everyman Media vs. Spirent Communications plc |
| Hollywood Bowl vs. Sovereign Metals | Hollywood Bowl vs. Fidelity National Information | Hollywood Bowl vs. European Metals Holdings | Hollywood Bowl vs. GlobalData PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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